Systemax Accepts Resignation of Gilbert Fiorentino and Executes Agreement for Fiorentino to Surrender $11 Million
May 09 2011 - 7:13AM
Business Wire
Systemax Inc. (NYSE: SYX) reported that it has accepted
the resignation of Gilbert Fiorentino, Chief Executive, Technology
Products Group and Director, effective immediately. His resignation
follows the Company placing him on administrative leave on April
18, 2011 while considering his termination. Fiorentino was placed
on administrative leave following the completion of the Company’s
independent investigation of its Miami, Florida operations.
Systemax reported that it has also executed an agreement with
Fiorentino whereby within 5 business days Fiorentino will surrender
assets to the Company currently valued at approximately $11
million. The agreement requires the surrender of 1,130,001 shares
of Systemax common stock owned or beneficially owned by Fiorentino
and $480,000 in cash. The agreement also requires Fiorentino to
disclose his and his immediate family’s personal assets; forfeit
undisclosed assets discovered by the Company; disclose information
regarding certain matters that led to his being notified of the
Company’s intent to terminate him; and to fully cooperate with the
Company in the future. Fiorentino and the Company also exchanged
mutual general releases and nondisparagement commitments, and
Fiorentino agreed to a 5 year noncompetition obligation. The
financial statement benefit to the Company from this agreement,
which will be less than $11 million due to accounting requirements
for equity transactions and the cost of the investigation, will be
recorded during the second quarter.
The matters investigated occurred over a number of years, did
not have a material impact on Systemax's previously reported
financial results in any reporting period, and were limited to the
Company's Miami operations. The Company’s Technology Products
Group businesses are continuing normal operations under the
direction of Robert Leeds, the founding CEO of the Company’s
Technology business, who will continue his role as Interim Chief
Executive, Technology Products Group. The Company plans to commence
a nationwide search for a permanent replacement.
Richard Leeds, Systemax’s Chairman and CEO said, “Our Board of
Directors and management team is focused on running and growing our
business, which remains very strong. The Company has moved forward
and I am very pleased that our dedicated management team and
employees are re-energized and looking forward to a new era of
profitable growth.”
About Systemax
Systemax Inc. (http://www.systemax.com), a Fortune 1000 company,
sells personal computers, computer components and supplies,
consumer electronics and industrial products through a system of
branded e-Commerce web sites, retail stores, relationship marketers
and direct mail catalogs in North America and Europe.
Forward-Looking Statements
This press release contains forward-looking statements about the
Company’s performance. These statements are based on management’s
estimates, assumptions and projections and are not guarantees of
future performance. The Company assumes no obligation to update
these statements. Actual results may differ materially from results
expressed or implied in these statements as the result of risks,
uncertainties and other factors including, but not limited to: (a)
unanticipated variations in sales volume, (b) economic conditions
and exchange rates, (c) actions by competitors, (d) the
continuation of key vendor relationships, (e) the ability to
maintain satisfactory loan agreements with lenders, (f) risks
associated with the delivery of merchandise to customers utilizing
common carriers, (g) the operation of the Company’s management
information systems, and (h) unanticipated legal and administrative
proceedings. Please refer to “Risk Factors” and the Forward Looking
Statements sections contained in the Company’s Form 10-K for a more
detailed explanation of the inherent limitations in such
forward-looking statements.
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